TOWN OF ULSTER, N.Y. -- The company Farm to Table Co-Packers will receive $775,000 in state grants to help pay for a $1.8 million project to expand its TechCity facility and buy additional equipment to increase production.

Company owner Jim Hyland said the money is coming from the Empire State Development Corp. and state Department of Agriculture and Markets and that the expansion project is being done with Hudson Valley Harvest.

"We are creating here what's called a food hub," Hyland said. "We are the Hudson Valley food hub in terms of aggregating from farms and then producing value-added (goods) and doing distribution to markets throughout the state and even outside the state."

Hyland said Farm to Table Co-Packers has, among other things, helped local farmers lower their costs for packing and distribution.

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"Last year, we worked with over 60 different farms, we had over 800,000 pounds of produce come through our facility here and go out in value-added ways into all different kinds of market laces," he said. "They go out to stores, schools, farm markets."

The state funding is expected to increase production capacity by 25 percent at Farm to Table Co-Packers, which has employment that ranges from 20 people during the off-season to 60 people when farms begin harvesting.

"It (the expansion) will probably (add) another six to 10 jobs as we move up production," Hyland said.

He said Hudson Valley Harvest "is a customer of ours that is (getting) frozen vegetables into stores in New York City. They also have ... applesauces, tomato juices, tomato sauces, a line of meat products, they make syrup and honey. They're really doing a great job of complementing the food hub that we already have here."

Farm to Table Co-Packers began using about 17,000 square feet of space at TechCity, the former IBM-Kingston site, in January 2010 and expects about 28,000 square feet will be used when the additional equipment is installed.

"It should take probably about a year to complete the project," Hyland said. "There are some things we're doing that are infrastructural, which take a little bit more time. We have to actually build some additional freezer and cooler space, and we have to buy some forklifts and trucks."

Hyland said Farm to Market Co-Packers primarily works with traditional agricultural products.

"We deal with a lot of green beans, we deal with a lot of corn and tomatoes," he said. "Those are probably three of the biggest products that we deal with in terms of produce."

Farm to Table Co-Packers largely distributes goods to retail outlets, farm stands and colleges between New York City and Albany.

"Probably about 95 percent of what we do is going to local stores and local customers," Hyland said.

"We're very much concentrated on local farms and local produce, but we also do products that are not local and go across country to different stores," he said. "That kind of helps us get through the winter and helps us keep the infrastructure that we have here."